Explain the importance of integrity and ethics in preparing and reporting financial information..
Clearly both integrity and ethics are important in preparing and reporting financial information. If you are completing your Tax Return, your return will be subject to the scrutiny of trained/expert accountants and if you have falsely represented your earnings, then you may well spend some time in prison. If you are making financial reports for your company or an individual, then it is crucial that your reports are accurate because we are judged by how we measure-up to the trust that others place in us. Business and commerce operates on the basis of trust and the belief that it is safe to do business with others. There have been many media reports about employees using fraudulent practices to divert employers assets (usually cash) to their personal account. They usually serve long prison sentences and bring shame on themselves and their families. Equally, they damage the business relationships between employers and customers.
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Assume that your company operates a joint-production process that generates three main products and one by-product. If you allocate joint costs only for financial reporting, would you ever care whether you use the net realizable value or the physical-measures method? Explain.